FAMILY BUDGET

Generally speaking , A budget is a financial plan for a defined period of time, usually a year. This is usually the case for corporates. In personal finance or in case of a family, a budget is the sum of money or salary earned and the summary of intended expenditures. It may include a budget surplus, providing money for use at a future time, or a deficit in which expenses exceed income.

A personal budget or home budget is thus a finance plan that allocates monthly personal income towards expenses, savings and debt repayment. Past spending and personal debt are required to be considered when creating a personal budget.

Why is the budget the start point for personal finance or for a family, I like to suggest it for three reasons one is for regular monitoring, evaluation and review at the end of the month and then the course correction as required. Once made a regular practice it also can be used as a strategic plan for the year or years ahead. Second reason is that unless measured improvement in any thing is difficult to achieve. Third reason is that if correctly made it can be used to shift the focus from expenditure to savings. Shall be dealing with it in details in the blog posts to follow . This is very important as life after retirement is increasing both due to early retirement and increase in life expectancy. Added to this are other factors like increasing educational costs,late marriages by next generations and dependency on the parents due to rising home costs.

Having seen the importance of preparing the budget for a family preparing it is relatively simple but some thing so simple is found to be difficult and prepared by very few and correctly implemented by even fewer families. Family budget is required to be used as a tool for improving family finances and ultimately achieving financial independence or freedom as I like to call it and I plan to discuss a few key aspects of it in the next blog in trying to make it easy.

The personal finance chain is very simple earn -budget -save-monitor-review-invest - grow savings and live happily doing it and in old age. Many simple things are not easy to implement hence the need of a teacher if you agree you are welcome to visit and enroll in www.moneymonk.me but otherwise for those who can manage it by themselves tis week ‘s blog on budget in  http://moneymonk-joe.blogspot.in/ will be useful .

Your feedback and comments are most welcome too.